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Monday, September 15, 2014

Daily update 9/15

It was a mixed market day.  Technology stocks hit the skids while the Dow was up slightly.  Here is a look at the SPX daily chart.

SPX was down only slightly today and is hanging in between the 18 and 50 SMAs. The dip buyers did just enough to hold SPX up today and no more.  This is expiration week which typically has an upside bias, but so far not so much.  I want to show the 60 minute futures chart of intraday data tonight.

It looks like we have a downtrend channel forming over the last several days.  We ended the day right about in the middle.  Which line get hits next?  I don't think we have had a perfectly formed downtrend channel like that in quite some time.  The three pullbacks we had so far this year were too steep and too volatile to form a channel.  I don't know if that means this one will last longer then the others or not.  I guess we will see.  Lets see what the overnight futures chart has to say.

The futures tested the green line today, but failed to stay above it.  I want to see a clear rejection of this line before saying it has become resistance again.  The -DI line got up to 34 which is really close to the key 35 level.  Is that enough selling pressure to make a low?  It can be sometimes.  It just depends on how the bulls are feeling.  Lets have a look at the IWM chart.

 IWM took quite a tumble today and ended up back below its 50 and 200 SMAs.  That looks like a pretty clear rejection at the .618-.786 retrace zone.  This is looking more like a top all the time.  Will the dip buyers come in at the 200 yet again? 

Wed. is FED day and all the talk is about whether they will change the language around rate hikes.  I have no idea if they will or if the market will care if they do.  The day before the FED meeting has seen upside gaps pretty often lately.  I wonder if that pattern will repeat tomorrow.  The market may idle until after that announcement on Wed. 

Here is an interesting article.  Record S&P 500 Masks 47% of Nasdaq Mired in Bear Market
Here is a snippet.

Beneath the U.S. stock market’s record-setting gains, trouble is stirring.  About 47 percent of stocks in the Nasdaq Composite (CCMP) Index are down at least 20 percent from their peak in the last 12 months while more than 40 percent have fallen that much in the Russell 2000 Index and the Bloomberg IPO Index. That contrasts with the Standard & Poor’s 500 Index (SPX), which has closed at new highs 33 times in 2014 and where less than 6 percent of companies are in bear markets, data compiled by Bloomberg show. 

I mentioned the trouble with Russell stocks on the blog before.  However, I did not realize the COMPX was in such trouble.  It was very strong over the summer and made new highs in Late Aug. along with SPX.  Many stocks more then 20% off their highs is a common occurrence just before a bear market.  I honestly don't know how many times you get numbers like that and you don't get a bear market though.  Nobody ever compiled that statistic that I saw.  Time to be very careful.  This market is slowly falling apart from the inside.


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